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“There Could Be Trouble” As US Fracking Revolution Prepares to Go Global

A new report showing the U.S. overtaking Russia as the leading producer of oil and gas in the world should put to rest any doubt that the fracking revolution that has occurred in the U.S. is for real, or as BP’s chief economist put it, “profound.” And now with the recent Environmental Protection Agency report on the impacts of fracking on drinking water being touted by the American Petroleum Institute as proof that fracking is safe, the industry’s insatiable greed got another boost. More recently, the Harvard Business School has also joined in the discussion calling for the end of the ban on exporting U.S. crude oil and warning about the implications of missing the “opportunity” offered by fracking. So with all of this momentum, what does ExxonMobil CEO Rex Tillerson think should be next? Less regulation. As previously mentioned on DeSmog , at this year’s CERAweek conference Tillerson […]

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BP: Shales Lift U.S. to No. 1 Global NatGas, Oil Producer

Even with turbulent and unsettled conditions in the global energy markets last year, the U.S. shale industry scaled new heights, lifting the country to No. 1 among global natural gas and oil producers, BP plc reported Wednesday. The oil major’s 64th annual Statistical Review of World Energy , one of the most respected energy forecasts by private or public economists, found that the unconventional growth in North America is surpassing all expectations. Chief economist Spencer Dale discussed the findings during a webcast and highlighted events expected to shape the global energy landscape over the next few decades. In a word, it’s shale — oil and gas. No. 1 is the continuing "shale revolution" in the United States, Dale said. The revised data in this year’s review suggest that the United States overtook Russia in 2013 to become the world’s largest producer of gas and oil. "We are truly witnessing […]

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Peak Oilists are the new Flat Earthers

Apparently it is necessary to point out that Peak Oil doctrine is still wrong. Ronald Bailey explains Hubbert’s Peak Refuted: Peak Oil Theory Still Wrong . He points out an author who has written multiple books defending Peak Oil. I just checked Amazon and can find four books from the mentioned author, written in 2001, 2005, 2008, and 2010. All are selling well. Not great, but okay. I’m astounded that so many people still believe that foolishness. Article gives some info I’ve not seen before: As I have explained earlier geologist M. King Hubbert famously predicted in 1956 that U.S. domestic oil production in the lower 48 states would peak around 1970 and begin to decline. In 1969 Hubbert predicted that world oil production would peak around 2000. Yes. The ol’ gig of my precisely calculated, ironclad calculation of the date of disaster is totally wrong so I will […]

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Retreat of ‘peak oil’: supply, demand unexpectedly expand global surplus

Robert J. Samuelson WASHINGTON — The recent meeting of OPEC provides an opportunity to understand the mysteries of the global oil market. As expected, OPEC decided not to cut its oil production. Barring unanticipated developments, prices will drop, says oil analyst Larry Goldstein. Potential oil supply, including drawdowns from bloated inventories, exceeds demand. Goldstein rightly cautions, however, that no one knows where prices will settle. Oil’s dramatic price changes seem baffling. In mid-2014, crude prices averaged around $100 a barrel; now, they’re gyrating between $50 and $60. Over the same period, U.S. gasoline prices have dipped from more than $3.50 a gallon to around $2.50. With the world economy slowly recovering, why have prices collapsed? The standard explanation comes in two parts. First, oil demand is what economists call price inelastic. Slight changes in supply and demand can produce large price swings. People and businesses need fuel. If oil […]

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Delayed gratification for OPEC, more pain for investors

Delayed gratification is said to be a sign of maturity. By that standard OPEC at age 55 demonstrated its maturity this week as it left oil production quotas for its members unchanged . It did so in the face of oil prices that are about 40 percent lower than they were at this time last year , delaying once again a return to the $100-per-barrel prices seen during the past four years. Why OPEC members chose to leave their oil output unchanged is no mystery . The explicit purpose for keeping oil prices depressed is to close down U.S. oil production from deep shale deposits–production that soared when oil hovered around $100 a barrel, but which is largely uneconomic at current prices. That production was starting to threaten OPEC’s market share. If OPEC were to cut its oil production now and drive prices back up, it would only lead […]

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Exxon at the crossroads: buy a rival or shrink

But the company’s focus on cash distributions to shareholders, and the fact that its oil and gas production is lower now than immediately after Exxon bought Mobil back in 1999, certainly look like evidence that it has given up on long-term revenue growth. Exxon is the world’s largest listed energy group, and like all big international oil companies it is facing structural challenges that make it difficult for it to grow. Stability while throwing off a lot of cash may be the best they can do. Critical strategic question Rex Tillerson, now in his tenth year as chief executive, faces a critical strategic question. Does Exxon accept that fate, curbing capital spending and returning cash to investors whenever possible? Or does it attempt to break out by making a large acquisition ? The decline in Exxon’s number of shares outstanding has been dramatic. In 1999, the newly merged company […]

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Is Peak Oil Behind Economic Disintegration?

Something is wrong with the economy. No kidding, you might reply, but what is the underlying cause? Is it Peak Oil? Or is capitalism just a system that doesn’t work and is destined to failure? Are we just stuck with inevitable deterioration in living standards for the majority, or is there at least theoretically something we can do about it? Would political decisions help or are we just doomed to watch the disintegration of civilization as the oil runs out? In an interview a few weeks back with Tom O’Brien of the From Alpha to Omega podcast , KMO asked him about the predictions of Peak Oil collapse and why they seem to have not come to pass the way some people thought they would: Tom O’Brien: “Think if we lived in Syria or Egypt. We might think [about] things slightly differently. I don’t know about yourself KMO, but […]

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World Exports versus Consumption, The ELM

The EIA has updated their International Energy Statistics  with annual production numbers through 2014 and export data through 2012. Sometimes these stats can be confusing as they include several types of production and exports. But for production I use only “Crude plus Condensate” and for exports I used “Crude Oil Exports” which I assume includes condensate as well. Also the export data is not exact, just close, because some importers are also exporters. For instance in 2001 the US exported 59,000 barrels per day. In 2012 the US exported 629,000 barrels per day. The exporting of condensate is allowed in the US and since the Shale boom condensate exports have increased quite dramatically because Light Tight Oil is rather top heavy with condensate. To get exports versus consumption for exporting nations I simply subtracted their exports from their production. The difference was what they consumed. Similar data can be […]

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Peak Resource Constraints Threaten Product Supply

We have for years been hearing about the potential for ‘peak oil’ and more recently about ‘peak metals’ but for the first time, several peer reviewed articles are warning us other peak resource constraints are threatening several key areas of product supply, including food. Peak oil has been discussed for a number of years, but its timing has been pushed out into the future by the emergence of high environmental impact mining techniques like shale oil, oil sands and fracking of natural gas (also used as an oil substitute) across the world. This change in timing is particularly notable in the US, where for the first time in many decades the nation is not dependent on imported supplies of fossil fuels. Coming at a time when OPEC is trying to retain some control of world markets, this has resulted in a massive price drop that is not truly related […]

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The Death of the Green Energy Movement

The green energy movement in America is dead. May it rest in peace. No, a majority of American energy over the next 20 years is not going to come from windmills and solar panels. One important lesson to be learned from the green energy fad’s rapid and expensive demise is that central planning doesn’t work. What crushed green energy was the boom in shale oil and gas along with the steep decline in the price of fossil fuel that few saw coming just a few years ago. A new International Energy Agency report concedes that green energy is in fast retreat and is getting crushed by “the recent drop in fossil fuel prices.” It finds that the huge price advantage for oil and natural gas means “fossil plants still dominate recent (electric power) capacity additions.” This wasn’t supposed to happen. Most of the government experts–and many private investors too–bought […]

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